A$4.2 billion financial services company discovered that their highly paid analysts were spending too much time aggregating data from various providers including Bloomberg, Thomson Reuters,and S&P into a plethora of Excel workbooks.
Each portfolio valuation group controlled a repository containing a loan model. Throughout time, different teams within the financial services company would develop slightly different versions of the loan model as needs changed from group to group. As a result,there was a lack of consistency across the organizational models. These models varied in flavor; different mechanisms, formulas, hard–coded cells, and labeling. It is important for models to maintain consistency throughout the organization so that portfolio valuation techniques remain constant. Inconsistencies in models could mislead financial professionals in guidance to customer
The organization also had no mechanism for updating the loan models across company. As the financial landscape transforms and asset valuation techniques evolve, the loan model warrants improvements. For such improvements to deliver value to clients, the model must be cleaned and enhanced uniformly across the organization. Use of valuable staff–hours, variation in model flavor and the inability for the organization to stay consistent in upgrading the model called for the change.